LANSING — Gov. Rick Snyder unveiled a plan Tuesday that would end millions in government benefits for Blue Cross Blue Shield of Michigan, or BCBSM, the largest health insurance provider in Michigan, saying the shift will provide more options for Michigan citizens, including students and recent graduates looking to enter the workforce.
MSU experts are giving the plan mixed reviews so far.
Some say the change — which would end $100 million in tax exemptions for the company and make it a nonprofit mutual insurance company — would level the playing field and give Michiganians more options for coverage.
But some critics say the plan would have a limited effect on health care costs, if any at all.
BCBSM has long been exempt from paying taxes on the condition they accept all patients, including those who might have been turned away elsewhere because of a pre-existing condition.
Under provisions of the Patient Protection and Affordable Care Act taking effect on Jan. 1, 2013, insurance companies will be required to provide insurance regardless of pre-existing conditions.
Changing the structure of BCBSM coverage will encourage competition, said William Strampel, dean of MSU’s College of Osteopathic Medicine.
For patients with pre-existing conditions and young people using their parents’ insurance — two demographics the Affordable Care Act targets — the governor’s proposal would open up insurance options to companies other than those of “last resort,” Strampel said.
Andy Hetzel, vice president of corporate communications at BCBSM, said Tuesday’s announcement is the culmination of about a year of discussing changes to health insurance regulation.
“We started off talking to the governor about changes to existing regulation, tweaks we want made,” he said.
The plan must be approved by the state Legislature, Attorney General Bill Schuette and the BCBSM board of directors.
Speaker of the House Jase Bolger, R-Marshall, said in a statement the governor’s plan will be referred to an insurance committee for further review.
“We will evaluate this proposal for its impact on patients and their ability to access and control their own health care,” Bolger said in the statement.
MSU philosophy professor Leonard Fleck, who helped draft former President Bill Clinton’s health care proposal to Congress in the early 1990s, said it’s too early to tell whether the plan would save consumers money.
Snyder is optimistic about his plan’s future, although he said it could take months for the plan to become legislation.
“Things could dramatically change in November,” he said, adding it most likely would not face his approval until after the election.
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